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Procedure Name:Paying SECA Taxes
Scope:All Staff
Revision Date:October 21, 2020
Last Review Date:May 5, 2023


Tip
titleMinister's Tax Guide

This page highlights information also found in the Zondervan's Minister's Tax Guide. https://www.fcmmbenefits.org/ministers-tax-financial-guide-2024-2023-tax-returns.


Option 1: Estimated Taxes

     The minister pays federal income taxes and social security taxes (SECA) directly to the IRS. form 1040-ES is filed by the minister on 4/15, 6/17, 9/16, and 1/15." 

Image result for form 1040 esImage Removed

Option 2: Voluntary Withholding

     The church withholds federal income tax and pays quarterly to the IRS. Additional federal income tax may be withheld

to cover the minister's social security tax (SECA) liability

.

This Option requires two things from the Employer (Church/Ministry):

Requirements #1: Forms 941 filed with the IRS quarterly by the church

.

  Requirement #2:

The

W-2 is provided to the minister and the IRS.
  • These requirements are both fulfilled by Reliant as the "church" that is paying the Minister's wages.  Reliant files the 941 for all Reliant employees with the IRS and sends out annual W-2 forms to employees.
    • Some Ministers find it helpful for Reliant to withhold extra Federal withholding taxes that they then then apply

    Minister can apply these tax payments towards their SECA tax liability when they

    file 

    file their taxes. 

    To withhold extra Federal taxes

    they

    please complete the W-4 form

    as normal with

     with lines 1 through 5 per

    their

    your "normal" settings

    and then on line 6

    . On line 4(c) add the extra taxes

    they

    you want withheld in addition to

    theeir

    your normal Federal taxes.

    Please be aware line 6

    The amount on line 4(c) is "in excess of the normal taxes"

    so, for

    . For example, if someone's "normal" Federal settings are married with 4 allowances and they typically see $200 withheld for Federal taxes, if they put "$400" on line

    6

    4(c) that person would see a

    toal

    total of $200 +

    $400 

    $400 =$600 withheld from their paycheck as Federal taxes. 

    To calculate what amount to use for

    line 6

    line  on your W-4 form, you can....

    1.
    1. Estimate the amount by doubling your FICA bonus.  Circumstances vary, but this method tends to be accurate although potentially slightly higher than needed, which then yields a tax refund for the minister when they file their taxes.  
    2.
    1. Seek counsel from a professional tax adviser
    3.
    1. . See Professional Fees for details on reimbursing these costs.
    2. Contact payroll@reliant.org for
    a
    1. an educational consultation.  Reliant cannot advise you on your tax withholding but we can assist with you
    in your calculations
    1. with personalized estimates that you can use in your calculations to determine the appropriate amount for line 4(c).

    Image Added

    UI Expand
    titleOption 1: Reliant Payroll Withholding

    The church (employer) may withhold additional federal income tax

    UI Steps
    UI Step
    UI Step
    Info
    titleReliant files 941 forms and provides W-2 forms to employees
    Tip
    titleRequesting Extra Federal withholding
    Info
    titleThis Option requires two things from the Employer (Church/Ministry):

    These requirements are both fulfilled by Reliant as the employer/"church" that is paying the Minister's wages.  

    • Requirements #1: Forms 941 filed with the IRS quarterly by the church.  

    • Requirement #2: The W-2 is provided to the minister and the IRS.



    UI Expand
    titleOption 2: Self-Paid Quarterly Estimated Taxes

    The minister pays federal income taxes and social security taxes (SECA) directly to the IRS. Form 1040-ES is filed by the minister on 4/15, 7/15, 10/15, and 1/15.

    To access the IRS payment site see https://www.irs.gov/payments. 

    Image Added

    6.    

    Image Removed

               

    (“Chapter 7 - Paying Taxes.” Zondervan 2019 Minister's Tax & Financial Guide for 2018 Tax Returns, by Daniel D. Busby et al., Zondervan, 2019, p. 114.)